The Financial Stability Board (FSB), the global financial body funded by the Bank for International Settlements, has released a new report on the financial stability risk associated with cryptocurrencies.

The 30-page study was published on Wednesday and describes a range of financial risks associated with various types of cryptocurrencies as well as industrial sectors, including private digital assets such as Bitcoin (BTC), stackable coins such as Tether (USDT) and decentralized finance. (defy).

The report points out some common risks, such as the potential failure of some stack coins, which pose a serious threat to the stability of the entire crypto ecosystem due to the prevailing trading volumes of stack coins. The FSB also noted the risks associated with the rapid adoption of DeFi and the resulting lack of clearly identifiable intermediaries, as well as the potential for greater involvement of the banking and other sectors.

The FSB also noted the risks associated with data holes in the crypto industry and warned of “the lack of transparent, consistent and reliable data on the cryptocurrency markets and their relationship to the underlying financial system.”

“These data gaps make it difficult to assess the full extent of the use of cryptocurrencies in the financial system,” the FSB wrote, adding that these gaps make it difficult to identify and measure the risks that arise in the crypto industry.

“The data available on public blockchains is intentionally borrowed,” the authorities wrote, as it is “difficult to identify users engaged in crypto activity.”

The FSB listed a large number of holes in the data, including the proportion of households investing in cryptocurrencies, the extent of crypto-currency fraud, exposure to the banking sector, owners, the number and value of transactions in the payments industry, and others. The organization noted that “questionnaire-based calculations cannot be adapted and updated infrequently or irregularly”.

The FSB pointed to data gaps related to DeFi, such as the unknown proportion of hashish versus institutional participation, the number of decentralized applications on the blockchain, calculations to measure impact, and others.

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“The borderless nature of cryptocurrencies makes it difficult to get a complete picture of these markets. As a result, there may be significant differences in the number of cryptocurrencies reported by different data sources,” an FSB spokesman told Cointelegraph. The data gaps in the cryptocurrency market are mainly due to “lack of standardized reporting, regulation, or compliance requirements,” according to the agency.

An FSB spokesperson told Cointelegraph that he has no information on the development of reporting tools for a globally standardized cryptocurrency.

Source: CoinTelegraph

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